Transcript The Takings Issue

Regulatory Takings Workshop
Saratoga, New York
August 17, 2001
Timothy J. Dowling
Chief Counsel
Community Rights Counsel
Community Rights Counsel
 Nonprofit public interest law firm
 Assists towns and other local governments in defending
land use controls and other community protections
 Emphasis on takings cases
 Close working relationship with the International Municipal
Lawyers Association
Community Rights Counsel Cases
 Mamaroneck, NY open space protections
 Lake Tahoe planning moratoria
 Washington, DC historic preservation laws
 Anchorage, AK fair housing laws
 San Francisco Tenant Protections
 Riverside, CA fire safety protections
 Pennsylvania & Ohio bans on harmful coal mining
 Rhode Island wetland protections (Palazzolo)
Bad News for Local Governments
 Many takings lawsuits
 Expensive and time-consuming to defend
 Many landowner victories in the U.S. Supreme Court
Good News for Local Governments
 Local governments win the vast majority of takings cases
 Landowner wins in U.S. Supreme Court are narrow
 Very strong arguments against an expansive interpretation of
the Takings Clause
Today’s Topics

Five Themes for Government Counsel Litigating
Takings Cases

Three Categories of Takings Claims

Ten Cutting-Edge Issues

Palazzolo v. Rhode Island

Tahoe Moratorium Case
Five Tips for Litigating
Regulatory Takings Cases
1. Narrow Text and Original Meaning
2. Judicial Respect for our Federal System
3. Judicial Deference to the Policymaking
Branches
4. Avoiding Unduly Harsh Fiscal Impacts
5. The Government as Guardian of Property
Rights and Property Values
Three Categories of
Inverse Condemnation Claims
1. Physical Occupation Cases
2. Pure Regulatory Takings Cases
3. Dedications and Exactions
Loretto v. Teleprompter Manhattan CATV
Corp., 458 U.S. 419 (1982)
A government-compelled permanent physical
occupation of private property is a per se taking
Per se rule is “very narrow”
A continuous right of access is permanent, even
if the actual invasion is intermittent
Lucas v. South Carolina Coastal Council,
505 U.S. 1003 (1992)
Regulation that denies all economically viable use
of land is a per se taking
Avoid per se liability only if regulation is justified
by “background principles of law”
Penn Central Transp. Co. v. New York City,
438 U.S. 104 (1978)
Multifactor Test:
Character of the government action
Economic impact
Reasonable, investment-backed expectations
Nollan v. California Coastal Commission,
483 U.S. 825 (1987)
Compelled dedication must bear a “logical nexus”
to the problem or concern posed by the proposed
development
The Nollan dedication failed because enhanced
beach-ride access is not logically related to the
loss of the view from the highway.
Dolan v. City of Tigard,
512 U.S. 374 (1994)
Dedication requirement must be “roughly
proportional” to the harm anticipated from the
proposed development
Precise mathematical calculation is not required
Must make some effort to quantify findings to
support the dedication
Top Ten Issues for Local Governments to
Win in Regulatory Takings Cases
Procedural Issues
1. Takings cases against local governments generally must be
filed in state court. Williamson County Reg’l Planning
Comm’n v. Hamilton Bank (U.S. 1985). Issue preclusion
prevents re-litigation of the same issues in federal court.
2. There is no right in state court to have a jury decide the
question of liability.
Top Ten Continued...
Defining the Lucas Box
3. A per se taking under Lucas occurs only where land is
rendered valueless.
4. Reasonable planning moratoria and permit delays are
not Lucas takings.
5. Statutes and regulations in place at the time of the
landowner’s purchase may act as “background
principles” that defeat takings claims.
Top Ten Continued...
Winning Under Penn Central
6. Clear rules define the “parcel as a whole” for takings analysis
and prevent segmentation into affected and non-affected
portions.
7. The finding of a taking under Penn Central requires a very
dramatic (greater than 90 percent) diminution in value.
8. There is no generalized means-end theory of takings liability.
The question of whether a land-use law advances a legitimate
state interest is a due process inquiry.
Top Ten Continued...
Properly Limiting the Nollan and Dolan Tests
9. The essential nexus/rough proportionality test of
Dolan/Nollan applies only to required dedications, not impact
fees and other development conditions.
10. The essential nexus/rough proportionality test of
Dolan/Nollan does not apply to so-called “unsuccessful
exactions.”
Palazzolo v. Rhode Island
121 S. Ct. 2448 (June 28, 2001)
5-4 win for landowner
“Movement” case handled by Pacific Legal
Foundation in the Supreme Court
Mush -- raises more questions than it answers
Palazzolo: Six Opinions
Justice Kennedy (Majority) -- joined by Chief Justice
Rehnquist and Justices
O’Connor, Scalia, and
Thomas
Justice O’Connor (Concurrence)
Justice Scalia (Concurrence)
Justice Stevens (Dissent)
Justice Ginsberg (Dissent)
Justice Breyer (Dissent)
Palazzolo v. Rhode Island (U.S.)
 Takings challenge to denial of permit to fill 18 acres of pristine
coastal wetlands
Palazzolo seeks $3,150,000 based on profits expected from
building 74 single-family homes
Rhode Island Supreme Court deemed the case unripe
because:
(1) Palazzolo failed to apply for a permit to build the 74
homes; and
(2) Palazzolo failed to seek permission to fill less than 11
acres or to build on the upland portion of the property
(applying MacDonald).
Four Factual Wrinkles in Palazzolo
1. The Nature of the Takings Claim:
Subdivision vs. Beach Club Proposal?
2. The Number of Houses that May be Built:
One or Several?
3. Palazzolo’s Acquisition Date: 1978 or 1959?
4. The Trial Court’s Nuisance Finding
Summary of Palazzolo Rulings
Case is ripe
Claim is not barred simply because Palazzolo
acquired the land after the rules were issued
No per se take under Lucas because the land
retained significant value
The Palazzolo Ripeness Ruling
Reaffirms basic ripeness rule: court must know
the extent of permitted development
“[A] landowner may not establish a taking
before a land-use authority has the opportunity,
using its own reasonable procedures, to decide
and explain the reach of a challenged
regulation.”
State law may impose additional ripeness rules
-- beyond federal ripeness rules -- to control
damage awards based on hypothetical uses.
The Palazzolo “Notice Rule” Ruling
Post-enactment acquisition is not an absolute bar
to a takings challenge to a statute or regulation
Fairness concerns
“Background principles” include statutes and rules
derived from a State’s legal tradition
The Four New York
Background-Principle Cases
1. Kim v. City of New York, 90 N.Y. 2d 1 (1997)
(requirement to place side fill to maintain lateral
support for a public road)
2. Gazza v. NYDEC, 89 N.Y. 2d 603 (1997) (wetland
protections)
3. Basile v. Town of Southhampton, 89 N.Y. 2d 974
(1997)(wetlands protections)
4. Anello v. Zoning Board of Appeals of the Village of
Dobbs Ferry, 89 N.Y. 2d 535 (1997) (steep slope
ordinance)
Palazzolo: Expectations Analysis
Pre-existing statutes and rules are still relevant to
the Penn Central test
O’Connor concurrence plus four dissenters
No other Justice joined Scalia’s view to the contrary
Palazzolo: The Lucas Per Se Rule Issue
$200,000 in value (6.4% of claimed value) defeats
a Lucas per se claim; a 93.6% value loss is not
enough to trigger the Lucas per se rule
“Token interest” does not defeat a Lucas claim
Palazzolo describes Lucas test both in terms of
“use” and “value”
Palazzolo: Concluding Observations
1. Both sides claim victory
2. The Court may have muddled the parcel-as-awhole rule
3. No discussion of the value of wetlands
4. More charged rhetoric from Justice Scalia
5. More rhetorical flourish from the Court in favor of
takings claimants
Tahoe-Sierra Preservation Council, Inc.
v.
Tahoe Regional Planning Agency,
216 F.3d 764 (9th Cir. 2000),
cert. granted, 121 S. Ct. 2589 (June 29, 2001)
“Whether the Court of Appeals properly determined
that a temporary moratorium on land development
does not constitute a taking of property requiring
compensation under the Takings Clause of the
United States Constitution?”
Tahoe Facts
Lake losing one foot of clarity every year due to
uncontrolled development
32-month planning moratorium to allow for
preparation of a regional growth plan
450 landowners brought facial takings claim
Tahoe: Trial Court
Moratorium reasonable in scope and duration
No interference with reasonable expectations
(average holding period in the Tahoe Basin = 25
years)
No Penn Central Taking
Per se taking under Lucas
Tahoe: Ninth Circuit
No Lucas Taking
Must consider all uses, including future uses
Cannot “temporally sever” the landowners’ property
interests (parcel-as-a-whole rule)
Agins v. City of Tiburon, 447 U.S. 255 (1980) -“mere fluctuations in value during the process of
government decisionmaking, absent extraordinary
delay . . . cannot be considered a ‘taking’ . . .”
Tahoe: In the Supreme Court
Key issue = meaning of the Court’s 1987 ruling in
First English
The only issue concerns the Lucas ruling
The trial court found that none of the land is
“valueless”
It is now undisputed that the moratorium was
reasonable in scope and duration
Restrictions under the regional plan are not before
the court